Is Shipping Taxable in Indiana? Indiana Sales Tax Rules for Shipping and Delivery Charges
In Indiana, shipping charges are generally taxable unless a specific exception applies. Shipping may be non-taxable only when the charge is separately stated and the delivery is made by a public carrier. If the charge is not separately stated, or if it is separately stated but delivered through carriers such as FedEx or UPS, it may still be taxable. This article explains Indiana shipping sales tax rules and ecommerce compliance considerations.
On this page
Is Shipping Taxable in Indiana?
Indiana shipping sales tax rules require careful review. Shipping charges are generally taxable unless a specific exception applies. Based on Indiana Department of Revenue Sales Tax Information Bulletin #92, shipping charges may be non-taxable only when they are separately stated and delivered by a public carrier.
If shipping charges are not separately stated, they are generally taxable. If they are separately stated but delivered through carriers such as FedEx or UPS, they may still be taxable.
Source: Indiana Department of Revenue, Sales Tax Information Bulletin #92 https://www.in.gov/dor/files/sib92.pdf
General Rule: Shipping Charges Are Often Taxable in Indiana
In Indiana, shipping, delivery, freight, and transportation charges should generally be reviewed together with the underlying sale. When a taxable item is sold and the seller charges the customer for delivery, the shipping charge may be included in the taxable amount unless it meets Indiana’s exception.
For example:
Product price: USD 100 Shipping charge: USD 8 Total: USD 108
If the USD 8 shipping charge does not qualify for non-taxable treatment, it is generally included in the taxable amount.
When May Shipping Be Non-Taxable in Indiana?
A shipping charge may be non-taxable in Indiana when both of the following conditions are met.
1. The charge is separately stated
The shipping charge should be clearly shown as a separate line item on the invoice, receipt, bill of sale, or checkout summary.
For example:
Product price: USD 100 Shipping charge: USD 8 Total: USD 108
If the seller bundles shipping into the product price, there is no separately stated shipping charge to exclude.
For example:
Product price, shipping included: USD 108
In this case, the full USD 108 is generally treated as the sales price of the taxable item.
2. Delivery is made by a public carrier
The second condition is especially important in Indiana. Based on the rule you provided, a separately stated shipping charge may be non-taxable only when the goods are delivered by a public carrier, such as USPS.
If the charge is separately stated but the goods are delivered by FedEx, UPS, or similar carriers, the shipping charge may still be taxable.
Examples for Ecommerce Sellers
Example 1: Separately stated shipping delivered by USPS
A seller charges USD 100 for a taxable item and separately states an USD 8 shipping charge. The order is delivered through USPS.
In this case, the USD 8 shipping charge may be non-taxable in Indiana.
Example 2: Separately stated shipping delivered by FedEx or UPS
A seller charges USD 100 for a taxable item and separately states an USD 8 shipping charge. The order is delivered through FedEx or UPS.
In this case, the USD 8 shipping charge may still be taxable.
Example 3: Shipping included in product price
A seller charges USD 108 for a taxable product with shipping included and no separate shipping line item.
In this case, the full USD 108 is generally taxable.
Common Compliance Issues for Ecommerce Sellers
Assuming separately stated shipping is always exempt
In Indiana, separately stating the charge may not be enough. Sellers should also review the delivery method.
Treating FedEx or UPS shipping as automatically non-taxable
If goods are delivered through FedEx, UPS, or similar carriers, a separately stated shipping charge may still be taxable under Indiana’s rules.
Not tracking the carrier used
Because the tax treatment may depend on the carrier type, sellers should retain shipping records, carrier names, tracking data, and order-level invoice records.
Applying another state’s rule to Indiana
Shipping taxability varies significantly by state. Indiana’s rule is more specific than many states because it may depend on both invoice presentation and carrier type.
Practical Tips for Sellers Shipping to Indiana
Sellers shipping taxable goods to Indiana customers should review their invoice format, shipping method, and ecommerce tax settings. If shipping is not separately stated, it should generally be treated as taxable. If shipping is separately stated, sellers should verify whether the carrier qualifies for non-taxable treatment.
For Shopify, WooCommerce, Amazon, Walmart, eBay, or custom websites, sellers should avoid using a single shipping tax rule across all Indiana orders unless the platform can distinguish the relevant carrier and invoice treatment.
Sellers should also keep invoices, checkout records, carrier records, tracking data, marketplace reports, and tax filing records for audit support.
Conclusion
In Indiana, shipping charges are generally taxable unless they meet a narrower exception. A shipping charge may be non-taxable only when it is separately stated and delivered by a public carrier, such as USPS. If the charge is not separately stated, it is generally taxable. If it is separately stated but delivered through FedEx or UPS, it may still be taxable.
For ecommerce sellers, the key compliance takeaway is clear: Indiana shipping taxability depends on both separate statement and carrier type.
Source: Indiana Department of Revenue, Sales Tax Information Bulletin #92 https://www.in.gov/dor/files/sib92.pdf